Industry supplier and ticking major Culp Inc. recorded fourth-quarter 2018 (ended April 30) net sales of $78.2 million, with ticking sales down 4.7% and upholstery up 11%, compared with the prior-year quarter. For the full fiscal year, the High Point, North Carolina-based company had net sales of $323.7, reflecting a 1% rise in ticking and a 10.4% increase in upholstery.
Fourth-quarter pre-tax income was $6.5 million, a 7.1% decline compared with the prior-year quarter. For the full year, pre-tax income was $26.9 million, a 9.4% decrease.
“We were pleased to finish fiscal 2018 with higher annual sales for Culp, reflecting growth in both of our operating divisions,” said Frank Saxon, president and chief executive officer. “As we look ahead to fiscal 2019, we are facing a significant challenge with the growth in imported Chinese mattresses and its effect on fabric demand from many of our customers. Despite the short-term challenges in the bedding industry, we are confident that Culp is well positioned for the long term with expanding sales channels and markets, a highly competitive global manufacturing platform and a strong balance sheet.”
In fiscal 2018, the company launched Comfort Supply Company by Culp, a supplier of finished bedding accessories. In its fourth fiscal quarter, Culp acquired Read Window Products, a window coverings company and purchased a majority stake in a sleep products and home goods e-commerce player, eLuxury.com.
For the full year, Culp’s return on capital was 25.4%, compared with 31.6% in fiscal 2017. Its cash flow from operations was $27.5 million, compared with 34.1 million in the prior year.
Iv Culp, president of the mattress fabric division, commented on the challenging market conditions in the ticking segment, saying: “Our results for the fourth quarter reflect … soft demand trends across the bedding industry, and we are starting to realize the impact of lower-priced imported mattresses. (However) despite these headwinds late in the fiscal year, we are pleased to report another year of solid annual sales of mattress fabrics.”
“Importantly, CLASS, our mattress cover business, has allowed us to develop new products with our core customers and to reach new customers and additional market segments, especially the boxed bedding space. In addition, our new line of bedding accessories, marketed under the brand name, Comfort Supply Company by Culp, will further extend our market reach.”
The company’s first-quarter 2019 projections include an overall sales decline of about 10% compared to the previous year’s first quarter. Pretax income for the first quarter of fiscal 2019 is expected to range from $3.8 million to $4.8 million. This compares with pretax income for the first quarter of fiscal 2018 of $6.7 million.
